Exposure of undifferentiated embryonal carcinoma stem cells to retinoic acaid (RA) previously has been shown to induce differentiation to parietal endoderm, and to rapidly increase cyclic AMP-dependent protein kinase (cAMP-PK) activity. Two stem cell mutants which are insensitive to RA have been used to study the mechanism of RA action. One (PCC4-RA) lacks the intracellular RA binding protein (cRABP); treatment with RA was found to cause a decrease in cytosolic cAMP-PK and RI subunit. The other (Nulli-RA) does have the cRABP; RA treatment was observed to enhance cAMP-PK activity even though later RA-mediated events are defective in this cell type. Treatment of F9 stem cells with RA also markedly alters the ability of calcitonin and parathyroid hormone to stimulate adenylate cyclase activity. Results indicate that F9 cells secrete immunoreactive calcitonin (iCT) into the culture medium while PYS (parietal endoderm-like) cells secrete immunoreactive parathyroid hormone (iPTH). Retinoid-induced differentiation of F9 cells to endoderm results in a progressive reduction in iCT production, while there is an increase in the level of iPTH found in the conditioned medium. Thus, iCT is produced by undifferentiated F9 cells which possess a calcitonin responsive adenylate cyclase system, while iPTH is produced by endoderm cells which respond to PTH with increased cAMP synthesis. These results raise the possibility that embryo production of these two hormones at specific stages in development may contribute to the regulation of subsequent steps of differentiation. Exposure of F9 cells to RA also provokes a 4-fold induction of cell surface N-acetylglucosamide B (1--Greater than4) galactosyltransferase (GT) activity. The RA-induced GT activity was further enhanced by treatment of the cells with 8-bromo cAMP. The ability of RA in combination with cAMP to induce GT activity was inhibited by both actinomycin D and cycloheximide, indicating that the increase in GT activity noted involved de novo synthesis of new enzyme protein.